In the past few days, Curve Finance users have been grappling with intense fear, as the value of the CRV token plunges, raising concerns about a potential black swan event. However, some temporary relief was experienced during the early Asian market on Wednesday when the CRV price managed to gain about 15 percent, trading around $0.578.
Join us as we shed light on the ongoing situation in the DeFi lending market.
Amidst the downturn of the CRV token, founder Michael Egorov’s decision to borrow a massive $60 million worth of USDT on the AAVE protocol and issue 300 million CRV tokens as collateral caught many by surprise. This move added further fuel to the already blazing fire of uncertainty surrounding the lending protocol.
Read More: DeFi Market Turmoil: Top Tokens Crash Post Curve Event, Fears of Contagion Loom
The current major concern revolves around the possibility of the CRV price plummeting below 37 cents, which could trigger liquidation. Unfortunately, the liquidity required to handle the 300 million CRV tokens appears to be severely lacking. With the total CRV liquidity hovering around a mere $4 million, the lending protocol faces an uphill battle to secure adequate liquidity. This situation threatens to exacerbate the crisis, causing traders to flee and liquidity providers to withdraw their funds, triggering a significant price dive.
Taking a closer look at CRV’s price action and on-chain analysis, a surge in trading volume for CRV has been detected, reaching approximately $372 million in the past 24 hours, closely aligning with its market cap of around $515 million. The increased activity can be attributed to several stable CRV pools being compromised on Vyper.
Although this trading surge has provided some respite, it is imperative for the CRV token to maintain its upward trajectory to avert a black swan event in the DeFi lending market.
In light of the looming catastrophe surrounding Curve Finance, prominent crypto whales, including Tron founder Justin Sun, have stepped in to offer their support.
Their involvement has brought a glimmer of hope to the anxious DeFi community, but only time will tell if their efforts will be sufficient to stabilize the CRV token and fortify the lending protocol.
On the path to innovation, Apple, Google, X, Airbnb, and Uber are quietly exploring stablecoins,…
Following the news, Pi Coin has dropped around 4% in the last 24 hours, now…
As political and crypto narratives continue to intersect, the Trump family’s crypto ambitions are once…
Bitcoin price has recovered from intraday lows and surpassed the $104,000 mark after the US…
Cardano has managed to find temporary support above the $0.6 mark, a level where buyers…
Ripple recently moved over 230 million XRP, valued at around $498 million, to an unknown…